INTERIM RESULTS PRESENTATION - Hollywood Bowl Group ... Interim Results Presentation FY2020 14....

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  • Hollywood Bowl Group plc

    INTERIM RESULTS PRESENTATION HALF YEAR ENDED 31ST MARCH 2020

  • Hollywood Bowl Group plc

    WELCOME

  • Hollywood Bowl Group plc

    A G E N D A

    STEPHEN BURNS CEO

    • Introduction

    • COVID-19 response

    • FY2020 H1 highlights

    • Summary

    • Financial performance

    • Q & A

    LAURENCE KEEN CFO

    Interim Results Presentation FY2020 1

  • Hollywood Bowl Group plc

    I N T R O D U C T I O N

    • Strong financial and operational performance since IPO in 2016

    • H1 FY2020 performance, pre-COVID-19, notably ahead of prior year period with near double-digit like-for-like revenue and significant free cash flow

    • Positive start to the launch of the new Puttstars mini golf brand trial

    • Experienced management team quickly responded to pandemic and Government directives

    • Extensive cost saving initiatives implemented whilst retaining top talent

    • Agreed extended debt facility, which combined with equity placing, has strengthened the balance sheet, working capital and liquidity position

    • Robust re-opening strategy in place

    Interim Results Presentation FY2020 2

  • Hollywood Bowl Group plcHollywood Bowl Group plc

    COVID-19 RESPONSE

    Credit: inspired media

  • Hollywood Bowl Group plc

    FA S T R E A C T I O N T O G O V E R N M E N T C O V I D - 1 9 D I R E C T I V E S

    23rd March • Government announces

    full lockdown

    24th March • Centres mothballed

    • New centre construction paused • Refurbishment work paused

    • Majority of support team furloughed

    Government announcement

    HWB operational response

    20th March • Government announces

    pub/gym/leisure closures

    20th March • All centres closed from 7pm

    • Stock removed and made safe • All machines emptied

    23rd March • Deep clean completed

    • Long life products replenished • All cash removed from

    centres • Centre teams furloughed

    16th March • Government announces

    social distancing

    17th March • Every other lane closed

    • 50% of bar furniture removed • 50% of amusements turned off

    • Contactless payment only • Cash flow forecast produced and

    discussions with lenders 18th – 21st March

    • Team members temperature checked before commencing work

    • Closedown strategy in place and implemented

    Interim Results Presentation FY2020 4

  • Hollywood Bowl Group plc

    C O V I D - 1 9 R E S P O N S E - F I N A N C I A L

    The Group reacted with pace and urgency to government restrictions in order to conserve cash flow

    • Employees: 98.6% of team members furloughed

    • Portfolio projects: All construction work on new builds and refurbishment projects deferred

    • Landlords: Strong negotiating position for the June rent quarter with rent free periods already negotiated with a significant proportion of landlords

    • Dividends: No interim dividend to be paid for H1 FY2020

    • Balance sheet: Agreed extended debt facility, which combined with relaxing of covenants and 5% equity placing has strengthened the liquidity position

    • Government initiatives: Utilising government schemes including Rates, VAT and Time to Pay, resulting in expected cash savings of £6m for FY2020

    • Overheads: Non-employee overheads (excluding property costs) are expected to reduce from c.£1.1m to c.£0.1m per month whilst centres remain closed

    • Net cash burn: The Group expects a monthly net cash burn of c.£1.2m whilst centres remain closed (once pre- COVID-19 liabilities have been paid)

    • Cash balance: Including trade creditors unwind, expecting to maintain a positive cash balance until late FY2021 if all centres remain closed and furlough scheme mirrors closure period

    Interim Results Presentation FY2020 5

  • Hollywood Bowl Group plc

    C O V I D - 1 9 R E S P O N S E - O P E R AT I O N A L

    The Group has focused on team member welfare during closure and in readiness for re-opening

    • 3 stage salary strategy to save cost, retain our top talent and financially support our team members

    • Regular virtual Q+A sessions with leadership team

    • Employee assistance programme, pin badge incentives and

    regular posts through our team member APP

    • Centre and departmental quiz nights

    • Virtual training commenced for all levels of the management

    team to ensure we ‘hit the ground running’

    • Team incentive and bonus scheme introduced to encourage

    adherence to the revised ways of working

    • Large quantities of PPE secured for team and customers

    including hygiene stations, perspex shielding and clear pre and

    post visit communication

    Interim Results Presentation FY2020 6

  • Hollywood Bowl Group plc

    R O B U S T R E - O P E N I N G S T R AT E G Y

    The internal size of our centres provide the required space to adhere to Government social distancing guidelines

    • Our adapted in-centre customer journey includes: • Only using alternate lanes/ golf holes/ amusement machines • Pre-booking only for peak periods • Queue control measures • Increased distance between bar and diner tables • A new visual guidance campaign “Have Fun – Play Safe” to

    educate and encourage customer distancing

    • Comprehensive safety, cleaning, operational protocols and daily health monitoring developed for team members

    • Reduced food and drink menu (also available as pre-booked options) to simplify operational delivery whilst protecting margin

    • Re-launch marketing programme created to include digital advertising, CRM campaigns and website pre-visit information

    Interim Results Presentation FY2020 7

  • Hollywood Bowl Group plcHollywood Bowl Group plc

    FY2020 H1 HIGHLIGHTS

    Credit: inspired media

  • Hollywood Bowl Group plc

    F Y 2 0 2 0 H 1 H I G H L I G H T S

    FINANCIALS

    • Total revenue +3.3% vs. PY

    • LFL revenue +8.6% vs. PY

    • LFL growth driven through both game volumes, +6.4% vs PY, and spend per game (£10.07), +2.1% vs. PY

    • EBITDA £29.3m, +38.6% vs. PY (+2.1% on IAS 17 basis)

    • Operating profit margin 27.7%, up 2.7%pts vs. PY

    • Free cash flow of £5.2m

    PORTFOLIO

    • 1 new centre opened (Puttstars Leeds)

    • 3 centres refurbished

    • Practical completion of HWB York and Puttstars York subject to lifting of COVID-19 measures

    • On site at Puttstars Rochdale

    • 2 new centres added to the pipeline with 10 centres now secured to open over the next 4 years

    INNOVATION & ENGAGEMENT

    • Pins on Strings now in 15 centres

    • New scoring system now in 40 centres

    • Dynamic pricing extended

    • Enhanced amusement offering

    • New blended customer service measurement introduced

    • Continued strong performance from digital channels

    • Retaining top talent though improved engagement with team members

    Interim Results Presentation FY2020 9

  • Hollywood Bowl Group plc

    29.3%

    30.0%

    29.4%

    31.6% 31.3%

    FY2017 FY2018 FY2019 H1 19 H1 20

    F Y 2 0 2 0 H 1 F I N A N C I A L H I G H L I G H T S

    REVENUE (£M) +3.3%

    * Adjusted for pre-IPO financing and IPO related costs

    GROUP ADJUSTED EBITDA (£M)* +2.4%

    EARNINGS PER SHARE (PENCE)* -8.7%GROUP ADJUSTED EBITDA MARGIN %* -0.3%PTS

    *

    114.0 120.5 129.9

    67.0 69.2

    FY2017 FY2018 FY2019 H1 19 H1 20

    33.4 36.2

    38.2

    21.1 21.6

    FY2017 FY2018 FY2019 H1 19 H1 20

    9.34

    12.17 12.52

    8.92 8.14

    FY2016 FY2017 FY2018 H1 19 H1 20

    * Pre IFRS 16 basis to allow for comparatives with PY Interim Results Presentation FY2020 10

  • Hollywood Bowl Group plcHollywood Bowl Group plc

    Centre level EBITDA H1

    FY19

    March FY19 - Centre level

    EBITDA

    Centre level EBITDA Feb YTD FY19

    LFL Revenue Growth

    New Centres LFL Centre Costs

    LFL GP% Margin

    Centre level EBITDA Feb YTD FY20

    March FY20 Centre level

    EBITDA

    Corporate Costs

    Group adjusted

    EBITDA FY20

    C E N T R E L E V E L E B I T D A G R O W T H + 2 . 7 %

    • LFL revenue growth of 8.6%

    • All revenue lines in LFL growth with amusements in double digit

    • Centre level EBITDA up 18.9% in the period to Feb 2020

    • New centre performance in line with management expectations

    • March centre level EBITDA impacted by Covid-19

    • Corporate costs increased by £0.2m (2.6%)

    27.0

    4.5 22.5

    4.5 0.6

    0.8 26.6

    1.1

    6.1 21.6

    Interim Results Presentation FY2020 11

    0.2

  • Hollywood Bowl Group plc

    I N C O M E S TAT E M E N T

    • Total revenue up 3.3%

    • LFL revenue up 8.6%

    • Gross profit 85.6% in line with management expectations

    • Operating profit down 2.8%, impacted in March by Covid-19% (£0.1m in March 2020